Star Africa’s sugar production fall
StarafricaCorporation experienced mixed performance for the nine months to December 2020 with Goldstar Sugars witnessing a decrease in production while Country Choice Foods recorded strong sales growth.
Goldstar Sugars production for the nine months to December 2020 was down 9.4 percent against prior year comparative reflecting the toll of the Covid-19 pandemic on the business.
At some point during the second quarter, the company had a three-week total shutdown due to the Covid-19 pandemic.
Also to have a negative impact on the business were critical power and water outages which affected production during the period under review.
The story was, however, different at Country Choice Foods where production and sales of new products are said to have started to increase significantly.
Products such as peanut butter, honey and pre-mixes are also well underway in their development and market testing phases, according to Company Secretary Aldo Musemburi.
In a trading update released Tuesday, Musemburi said sales at Country Choice Foods increased by 24 percent for the 9 months to December 2020 from the prior year comparable period.
With regards the company’s debt overhang, Musemburi said the company had re-negotiated the amounts due on some of its legacy debts and, thereafter, managed to settle significant portions of amounts outstanding to the creditors.
“This is expected to improve the gearing position and allow the company to refocus funds on critical plant maintenance and upgrade and to ultimately increase capacity utilisation,” Musemburi wrote.
He, however, said the rising costs of production mainly as a result of increases in plant maintenance costs have not been transferrable to customers as pressures rose on the company to reduce prices in the face of threats of imported sugar.
The inflationary pressures have put significant pressures on the company from suppliers and customers alike.
As a solution, Musemburi said the company effected a 15 percent decrease in manufacturer and bottler-grade sugar prices in December 2020 for its customers and, in turn, also negotiated some decreases in supplier costs with some of its main suppliers.
The intent, according to Musemburi, is for the company to stay competitive.
Going forward, the Company said it remains confident that the ensuing quarter will witness enhanced stability in the market which will boost capacity utilisation of the company as demand for the company’s products is expected to remain strong locally and in the region.–ebusinessweekly.co.zw
